Original URL: http://www.theregister.co.uk/2012/06/01/ultrabook_pricing_challenge/

Ultrabooks: objects of desire but just too darn expensive

Priced to stay on shelves?

By Tony Smith

Posted in Laptops and Tablets, 1st June 2012 11:34 GMT

Here's a snippet of market data of interest to folk keeping tabs on the Ultrabook market. In the UK, during the past four years, laptops costing £800 or more have never taken more than 7.5 per cent of notebook sales as a whole.

That's no great surprise, perhaps - you'd expect cheaper laptops to outsell pricey ones. But it is a problem for Intel, which wants World+Dog to ditch their old, thick notebooks in favour of new, skinny Ultrabooks that cost more than £800.

According to GfK, a market watcher which tracks sales of this kind of kit, Ultrabooks and other such machines - Apple's MacBook Air most notably, but it's not the only non-Ultrabook ultra-slim laptop out there - are experiencing positive growth.

But, says GfK analyst Manish Goenka, their sales haven't yet expanded sufficiently to turn around the broader decline in the £800-plus notebook segment.

That section of the notebook market has only experienced positive growth in January 2011 and, later, in December 2011, and it has been rapidly declining since then. The rate of decline is rising.

That doesn't bode well for Intel's hope that the Ultrabook will this season become a mainstream product. To that end, Intel is now demanding that Ultrabook makers - those of them who want to use its Ultrabook trademark, at least - build even more technology into their offerings, specifically its anti-theft and identity protection tech, plus either USB 3.0 or Thunderbolt.

All nice-to-have features to be sure, but adding more kit is not a strategy geared toward reducing the cost to the consumer.

Goenka notes that the notebook market as a whole is "struggling" to achieve positive growth. Ultrabooks may be being widely promoted by Intel, but persuading punters to upgrade to an £899 machine rather than a £499 notebook will be, as Goenka says, "a major challenge".

Will consumers make the move? Goenka is noncommittal: we'll have to wait and see, he says. While Ultrabooks are having a job pushing up notebook demand, tablet sales have been showing 200 per cent plus year-on-year growth for the last few months and there's no sign of that trend slowing.

Folk will want to take tablets on holiday with them this summer. Come the autumn, Windows 8 will launch, and that looks set to drive tablet demand further.

The arrival of Windows 8 will help Ultrabook sales too. But if they stay priced above £800, in the UK at least, buyers are more likely to eye tablets at half the price or less. ®